TIME
Magazine
Who
Gets the Stuff?
Even when there's a will, the heirs may squabble over the
estate. A few simple steps ahead of time can head off conflict
By
Sally S. Stich
The best estate-planning advice Harry Leiser ever got came
from his rabbi. "He had seen too many families fight
over estates after the death of the parents," says Leiser,
56, a New London, Conn., commercial real estate owner.
"He suggested two things: treat each child equally, and
don't rule from the grave."
Leiser,
the father of two grown sons one a law student, the
other a teacher took the advice to heart. "Family
harmony was my motivation," he says, "and I divided
my primary assets equally between my sons with no strings
attached even though one has much greater earning potential
than the other." Moreover, Leiser told his sons what
they could expect so that any potential conflict could be
dealt with before his death.
Estate planners would applaud Leiser and his rabbi. "Too
many people think of estate planning in terms of preserving
their assets," says estate attorney Les Kotzer of Toronto.
"They should instead be focused on preserving the family."
Like many other estate attorneys, Kotzer, co-author of The
Family Fight: Planning to Avoid It, has seen his share of
family squabbles because of something parents did or
didn't do in their will.
There's
no question that the problem of family disharmony is on the
rise, says Dennis Belcher, chairman of the Real Property,
Probate and Trust Law section of the American Bar Association
(A.B.A.). There's more wealth than ever, and family relationships
are more complicated as a result of the high number of remarriages
and blended families. Making matters worse, among Americans
50 and older, only 17% have a will, a durable power of attorney
and a living trust, according to the AARP. But even when parents
have taken care of business, the potential for bad feeling
runs high. "Parents tend to keep finances and plans a
secret from the kids," says Sanford J. Schlesinger, chairman
of the wills-and-estates practice at the firm Kaye Scholer
L.L.P. in New York City, "and then the kids are shocked
to find out what they perceive to be their parents' 'real'
feelings about them."
It's
not that parents deliberately make bad choices, says estate
lawyer Colleen Barney, co-author of Best Intentions: Ensuring
Your Estate Plan Delivers Both Wealth and Wisdom. Rather they
operate under dubious assumptions, as Elizabeth Shen, 66,
a widow and mother of six in Arcadia, Calif., did when she
approached Barney about estate planning. She had decided to
appoint her eldest son and daughter co-executors, without
telling them first. Barney suggested that she invite all six
kids to the planning meeting. When the topic came up, Shen's
eldest daughter, who travels a lot, didn't want the responsibility.
Says Shen: "But it opened the door to a discussion among
all six, who unanimously agreed their oldest brother was the
most capable for the job."
If
told ahead of time, children can also reverse parents' decisions
about the distribution of assets. As Bernie Walsh, 70, a retired
insurance salesman in Tustin, Calif., sat in his lawyer's
office with his wife Antoinette and three of his four children,
he asked the children how they would feel if he left nothing
to their sister (the one not present), with whom he had had
a long-standing problem. The three siblings jumped to their
sister's defense. "The four kids are all close to one
another," says Antoinette, 64, "and they wanted
their sister to have her fair share."
"Parents
tend to forget that kids equate the equality of the inheritance
with the equality of their parents' love," says psychologist
Eileen Gallo, vice chair of the A.B.A. Committee on the Psychological
and Emotional Issues of Estate Planning. "Parents may
have good reasons for leaving unequal amounts for example,
a child who has given up a career in order to care for ill
or aging parents might get more. But without discussing it
with the children, parents are setting up the possibility
for resentment."
The
biggest family feuds, regardless of the size of the estate,
are over personal property. "Many parents, in an effort
to avoid conflict or simply because it's so much work
take a 'Let them work it out after we're dead' approach,"
say Joanna Reiver, an estate attorney in Wilmington, Del.
Since there's an emotional value to family belongings that
supersedes money, that can be a serious mistake. Jerry Wolf,
an attorney in Fort Lauderdale, Fla., recalls a case of his
in which two siblings fought over their mother's jewelry.
"The legal fees topped $70,000 for something that was
worth less than half that amount," he says.
Researcher
Marlene Stum, associate professor of family social science
at the University of Minnesota, has developed educational
resources to help family members make more informed decisions
about the transfer of nontitled property. Possible solutions
include adding a page to the will that spells out who gets
what or, on a more informal basis, letting kids tag things
while parents are still alive. At the very least, parents
should provide guidance. After hearing about a workshop based
on Stum's research, Shirley Stelter, 68, of Moorhead, Minn.,
decided to tackle the issue with her four children. "I
took photos of everything and sent them to the kids and asked
about each item: 'Would you be interested in this?' "
For anything that more than one of them wanted, Stelter and
her husband Willis laid down a rule: draw straws or toss a
coin. Son Jon, 45, an electrical engineer in Minneapolis,
thinks his parents' plan is fair. Still, much as he appreciates
his mother's foresight, he admits he didn't look at the photos
for several weeks. "My first reaction was 'I don't want
to think about my parents' death,'" he says.
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